In the Headlines
February 1, 2023

Will Latin America See Big Gains from Global Tax Reforms?

Latin America Advisor, The Dialogue

Tax attorney Eugenio Grageda was interviewed by The Dialogue's Latin America Advisor about how a global minimum tax (GloBE) will affect Latin America. The Organization for Economic Cooperation and Development (OECD) recently released analysis predicting the expected global revenue gain from an international tax system will be around $220 billion, up from previous estimates of $150 billion. Mr. Grageda explained that Pillar 1 of the plan will provide larger markets like Brazil and Mexico the right to tax certain residual profits from the sales of international companies operating in their jurisdictions. He added that concerns about the plan's implementation arise from how Pillar 1 and GloBE will be administered as well as how much it will truly offer developing countries.

"The complexity concerns relate chiefly to how the Pillar 1 and the GloBE are administered in practice; it is especially relevant for developing states that are the ones typically with limited tax administration capacity," he said. "...With respect to Pillar 1, although developing countries have supported its implementation based on the idea that it will increase their allocation of taxable profits, the dissatisfaction comes from three major concerns: limited scope, complexity and implementation barriers."

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